EXPERIMENT IN STATE CAPITALISM 77 northern tribes were followed by temporary treaties of uneasy peace. The terms of the treaties were humiliating to a Chinese emperor, for while some of these kingdoms acknowledged the emperor, it was not they but the emperor who had to give annual contributions in silver and silks to the northern tribes, running anywhere from a hundred thousand to a quarter of a million dollars a year. This acted as a tremendous drain on the imperial treasury. The domestic administra- tion had always been lax, and the government was constantly running into financial deficits. Wang Anshih believed that he was a great financial wizard who could raise money for the imperial treasury by juggling with the systems of taxation and conscription. I believe that the desire to build China into a powerful state and to increase the prestige of the empire through wars of conquest in the north-west were prime factors in influencing the young emperor Shentsung in Wang Anshih's favour, for Wang's administration was characterised by several wars started by China with the northern tribes, some victories and one disastrous defeat. In order to carry on wars, the Emperor needed money, and in order to have money, the country's financial system had to be reorganised. Yet, without ever questioning the sincere motives of the reformer, we shall see how these reforms, financial and economic in character, produced the most grievous con- sequences of a different nature. Soon after Wang Anshih had arrived at the capital, Szema Kuang had an argument with him in the Emperor's presence which seems to sum up the fundamental opposition of the two sides. The imperial treasury was actually impoverished at this time, and during an im- portant ceremony at the worship of Heaven in spring, the Emperor wished to dispense with the customary gifts of silver and silks to the officials, thus saving some money for the imperial household. This started an argument between Szema Kuang and Wang Anshih. Wang Anshih maintained that the ^national treasury was impoverished only because the officials did not understand finance. "What you mean by finance," countered Szema Kuang, "is only increase of taxation and levies from the people." "No," said Wang Anshih. "A good financier can increase the government revenue without increasing taxation." "What nonsense! After all, a nation possesses a definite amount of wealth, and this wealth is either in the hands of the people or in those of the government. No matter what measures you carry out or by what names .you call them, they can only mean taking away part of the wealth of the people and giving it to the government." The Emperor was inclined to agree with Szema Kuang, and for a month or two the measures were held in abeyance.